updated 10:37 pm EDT, Thu April 25, 2013

Ruling more in line with Microsoft claims, well short of $4 billion request

US District Court Judge James Robart of the Western District of Washington has issued a critical ruling in the Motorola Mobile versus Microsoft patent lawsuit. The judge has decreed that Motorola Mobility is entitled to nearly $1.8 million per year from Microsoft for use of its standards-essential H.264 video playback and 802.11 Wi-Fi patents, a far cry from the $4 billion annually Motorola and its parent company Google demanded at the beginning of the lawsuit.

The court noted, in its 207-page ruling, that there were 92 different patents guaranteeing 802.11 interoperability. If each licensee demanded the Motorola royalty (which at one point it lowered to 1.15 percent), then just the cost of wireless networking would exceed the current price of the device it was used in.

Motorola had little official to say after the ruling. In a very brief statement it said that "Motorola has licensed its substantial patent portfolio at reasonable rates consistent with those set by others in the industry." Microsoft Deputy General Counsel David Howard said that the decision "is good for consumers because it ensures patented technology committed to standards remains affordable for everyone.

Motorola had been seeking as much as $4 billion per year for its patents, while Microsoft believed that Motorola Mobile and Google were ignoring previous commitments to license the patents on a fair, reasonable, and nondiscriminatory (FRAND) basis, and says that it only owes $1.4 million per year for use of the patents. The judge agreed nearly entirely with Microsoft's position.

Microsoft claimed that Google agreed to grant a worldwide license for H.264 patents as part of the MPEG-LA AVC essential-patent rules, under the standard rate agreement, rather than the exorbitant rates Motorola wished to charge the console maker. Motorola refused to license to Microsoft before it was sold to Google -- and while independent, Motorola wasn't subject to MPEG-LA's licensing requirements, being neither a licensee or licensor. Judge Robard didn't address the MPEG-LA issue and made a blanket ruling on both the H.264 patents and the 802.11 portfolio.